On 3 March this year, the LSE Council asked Lord Woolf to conduct an independent external inquiry into the School's relationship with Libya, Saif Gaddafi and related matters. That inquiry has now been completed and Lord Woolf today submitted his report to LSE.

At the same time, the question of the academic integrity of Saif Gaddafi's PhD was referred to the University of London under the Procedure for Consideration of Allegations of Irregularity in Relation to University of London Awards. The Gaddafi PhD was awarded by the UoL before degree awarding powers were transferred to LSE, and now has to be assessed carefully in accordance with UoL procedures.

In order to ensure that a comprehensive picture is reached, the council has decided that Lord Woolf's report and the UoL panel decision should be released at the same time. As a result, LSE does not expect to publish the Woolf report until both processes are complete. This is expected to be later in the Michaelmas term.

Update 31 March 2011

The following document provides background information on the issues surrounding LSE and Libya. We hope it is useful to those who have requested further information.

The Council have been working closely with the Director’s Management Team in an effort to steer the School through this difficult period. The Council, including academic governors, has discussed the matter on 1 March, 3 March and 17 March. Following the statement of 3 March, linked to the LSE circular of that evening, it has now been possible to assemble a more detailed narrative.

Recent events concerning the Directorship

At an extraordinary meeting of the Council on 3 March 2011, the Chairman on behalf of the Council accepted the resignation of the Director with reluctance and regret. The Director agreed to stay on whilst an interim Director was selected, with the unanimous support and confidence of the Council. Professor Judith Rees was appointed interim Director on 17 March 2011 by a special committee advised by the Pro-Directors. She will take up the post on 2 May 2011. The process for the selection of a permanent Director will begin quickly. The academic community had a meeting on 23 March to offer advice about the criteria for the Directorship and about the long term issues that the next Director should address. Nomination forms for the academic members of the Directorship Selection Committee will issue in the next few days.

What are the School’s links with Libya?

Saif Gaddafi

Saif al-Islam Muammar al-Gaddafi is an alumnus of the School. He was admitted to the School in 2002 to study for an MSc in Philosophy, Policy and Social Value which he passed in 2003 with a mark of Merit. He went on to take a PhD at the School, the award of which was confirmed on 31 October 2008. His thesis has been in the public domain since that time. No formal allegations had been made as to academic misconduct until the events of recent weeks. The School is investigating claims of plagiarism and ghostwriting, using the established LSE procedure for dealing with allegations regarding authenticity.

The donation to LSE Global Governance

In June 2009, the Gaddafi International Charity and Development Foundation (GICDF), headed by Saif Gaddafi, pledged to donate £1.5m to LSE Global Governance over five years. Of the £1.5m, a single installment of £300k was received by the School and no more has been or will be accepted. Following Saif Gaddafi’s speech on Sunday 20 February, the Director took immediate steps to stop new activities under the North African programme and proposed to Council that a sum equivalent to that received from the Foundation (£300k) be set aside to provide scholarships for North African students. A small group to be overseen by the Pro-Director (Research and External Relations) Stuart Corbridge, chaired by Professor Anne Phillips and with student and lay governor membership, will arrange allocation of the £300k scholarship fund. A review is also being carried out of the amount and future destination of the residual amount, if any, of the Foundation donation received.

In considering the donation, guidance contained in section E1 of the Charity Commission Compliance Toolkit (Chapter 2) was considered by the Office of Development and Alumni Relations. When first considering the matter on 23 June 2009, Council were informed that:

§ the Foundation is registered in Switzerland, accredited by the UN, and filed its audited accounts on an annual basis;

§ that no academic constraints had been placed on the use of the gift, although Mr Gaddafi had requested Professor Held’s assistance in developing a Centre for Democracy and Civil Society in Tripoli;

§ that Libya’s relationship with the West had improved in recent years, and that Saif Gaddafi was considered to be a reformer;

§ that the gift would not be funded by the Libyan State or regime, but would come from donations by companies in the private sector (the sources of which were disclosed to the School as part of due diligence);

§ that a range of views had been expressed by members of the Development Committee, with a clear majority in favour of accepting the donation;

§ that the principal risk of acceptance was reputational;

§ that whilst recognising that the reputation risk appeared high in relation to the size of the donation, Council were also mindful of the dangers in not offering hope of rehabilitation and engagement to people in isolated states.

The Council agreed to accept the donation.

Following the meeting of Council on 23 June 2009, the then SU General Secretary, Aled Dilwyn Fisher, undertook private research which aimed to inform his opinion on the propriety of the gift. The outcome of that endeavour was reported to Professor Held in a letter copied to the Director as follows:

“It is quite clear that not only is the donation acceptable, it should be encouraged. This is exactly the kind of organisation the School should be associated with - a group struggling for justice under what continues to be, despite reforms, a repressive and brutal regime. Indeed, it is rare that NGOs have £1.5m to give away like this, so we should grasp the opportunity.”

The Council reconsidered the donation on 20 October 2009, in the light of concerns about the handling of the release of convicted Lockerbie bomber Abdelbaset al-Megrahi. The meeting was chaired by Sir Anthony Battishill. Council were presented with a covering paper from the Director setting out the pros and cons of the donation and concluding that, “on balance, I would proceed. But, as I said last time, if Council members collectively took a different view, then I would regard that as an entirely reasonable viewpoint to take, and I believe the reputational consequences of changing our minds, while not trivial, are manageable.” Council were also presented with, and considered carefully, a ‘dissenting note’ from Professor Fred Halliday and a file of press coverage of the release of al-Megrahi and Saif Gaddafi’s comments and behaviour in relation to those events.

Council were asked to consider whether, in the light of events over the summer, LSE’s links with Libya had attracted negative publicity to the School, or might do so in future and, if so, whether that was sufficient to warrant reconsideration of the gift. In addition to reiterating the due diligence points conveyed to Council at their earlier discussion on the donation, Professor David Held (Co-Director, LSE Global Governance) made the following points:

§ that the views espoused by Professor Halliday were not necessarily shared by all in the academic community;

§ that, having trawled traditional media and the blogosphere, no evidence had been found that LSE’s links with Libya had attracted criticism, despite the ‘storm’ created by the Al-Megrahi affair;

§ that it was important to engage with the Middle East and North Africa;

§ that due diligence work and research had been undertaken to establish the credentials of the Foundation. The donation had been extensively debated within the Development Committee before it reached the Council for decision;

§ that the Foundation was created in order to be to be an exemplary NGO within North Africa. Its support for democracy and human rights had at times placed it at odds with the Libyan State, but it had enjoyed some success in areas such as penal reform;

§ that, following the Council meeting on 23 June 2009, Professor Held had been invited to join the Board of the Foundation in an individual capacity. Upon the advice of Council, Professor Held would resign that position;

§ that the donation from the Foundation represented less than 20% of the operating costs of LSE Global Governance, with the remainder coming from a diverse range of other sources.

In their deliberations, the Council considered at length the following points:

§ that there were concerns about the reputational risk of rejecting the gift, having accepted it in the summer, with a public signing ceremony having taken place;

§ that in future more information should be provided to Council about controversial potential donations, more time allowed for consideration, and Council should benefit from a “devil’s advocate” approach when considering the arguments;

§ that in future the totality of the School’s relationship with a country should be overseen to enable early identification of potential reputational risk;

§ that some individual members of the North American Advisory Board had indicated that acceptance of the donation would not affect the extent to which US alumni would financially support the School;

§ that although Professor Held had joined the Board of Trustees of the Foundation after acceptance by Council of the donation to LSE Global Governance in June 2009, concerns remained about the perceived conflict of interest and that Professor Held should therefore resign his position on the Board. This he subsequently did.

On balance, the Council resolved that the decision to accept the gift should stand. The Council’s decisions were fed back to Professor Halliday who responded to both the Director and the Secretary and Director of Administration on 12 November 2009, disagreeing with the outcome but commending the thoroughness with which the Council had explored the issue and acknowledging that “the School has done its best in a difficult situation.”

LSE Global Governance subsequently also accepted an award from the GICDF of £22,857 to support staff travel costs, mainly airfares, for academic speakers to travel to Libya.

The administration of LSE Global Governance will be the subject of an internal review, to be led by Professor Stuart Corbridge, Pro-Director (Research and External Relations).

LSE Enterprise Limited (LSEE)

Context

LSE Enterprise is the wholly owned commercial subsidiary of the School. It operates under a memorandum of understanding approved by LSE Council on an annual basis. The memorandum of understanding includes sections outlining the objects of the company as well as the mission, values and guiding principles under which the company will be operated. The company has its own Board of directors drawn from Council and DMT members as well as academic staff, who meet six times a year and are responsible for the governance of the company. The company formally reports to Council annually through a report by the Chairman, Mr Roger Mountford, who attends all Council meetings by invitation.

Reporting

LSE Enterprise’s executive education activities in Libya were reported to Council in the annual report in November 2008, October 2009 and November 2010 – including extensive coverage in the published annual report 2010. These executive education activities were also reported in articles in the LSE alumni magazine (“A Line in the Sand”) Summer 2009, the Financial Times (“Libya calls on LSE”) Sept 2009 and the Wall Street Journal, October 2009, as well as many web based features and case studies. Because LSE Enterprise is a separate company its activities are not pre-approved by Council.

Origins

The UK Ambassador in Tripoli approached the LSE with an enquiry from the Libyan National Economic Development Board’s Director General, Dr Mahmoud Gebril, who expressed interest in receiving a competitive bid to undertake training work in Libya. According to Al Jazeera, Dr Gebril is currently a member of the rebel National Transitional Council based in Benghazi, and has recently been appointed head of an interim government. He led the diplomatic negotiations with France which led to President Sarkozy's recognition of the rebels as the legitimate representatives of the Libyan people[1].

The programme would be aimed at improving the managerial and technical skills of a large cohort of individuals, who it would be hoped would in time provide expertise in developing the systems of public administration in the country. The NEDB was a new organisation appointed by the central planning committee with a remit to push reform and change into old and decrepit government systems. LSE Enterprise was in competition with at least one other bidder, known to be the Singapore Development Agency.

Participant selection and programme details

Following national advertising by the NEDB for applicants to the course, LSE Enterprise contracted the UK’s leading on-line psychometric and competency testing organisation to evaluate all of the applicants. Data was collated and assessed in the UK. LSE Enterprise shared the results with NEDB and made the choice of participants on the first tranche of Libya based programmes. Participants came from a range of sectors, mainly public enterprise, public administration and some private sector.

The title of the course was Public Administration and Leadership. The course ran in two phases. Firstly a Libya-based programme where the fundamentals of public administration were taught. The first phase was five weeks, each week tackling a different aspect: introduction to public administration; economic approaches to policy evaluation, budgets and debt; public sector strategy; and regulation and law. The whole programme started in May 2008 and concluded in February 2011.

The top performing half of each cohort, based on an evaluation undertaken solely by the LSE faculty and LSEE programme managers, would then progress to a second leg of the programme based in London.

The second leg concentrated on more practical managerial skills of strategy and performance management, key characteristics of change and change management, organisational leadership and leading through change, personal leadership development, public management and strategy, strategic planning, crisis management, bargaining and negotiation skills.

Tuition for the Head of the Libyan Investment Authority

The company undertook a short programme of tuition for the Head of the Libyan Investment Authority at the beginning of 2010. The contract value was £24,375 which has been received. This figure differs from the figure of £20,000 given in the School’s statement of 3 March on the Director’s resignation; it has been established that the earlier figure did not use the correct rate of exchange for the date of the transaction.

Financials

The total value of the contract between LSEE and the NEDB was £2.2m, of which £1.5m has been received. An amount of £705K is outstanding. The Chairman of LSEE, who is Council's Nominated Officer with respect to LSEE, has advised Council that a provision is likely to be necessary against the outstanding debt owing from NEDB but that no decision to make such a provision needs to be made until the Company's year-end in July. He has further advised Council that, should such a provision be made, the effect on LSEE's results and cash position would not be so great as to destabilise the Company. All profits generated by the work of the LSEE are gift-aided to the School on an annual basis. There is no mechanism for repaying the money to the Libyan people.

Howard Davies' Role as Economic Envoy

In 2007 Howard Davies accepted an invitation from the British Government to serve as an economic envoy to Libya.

Howard went on to advise Libya’s sovereign wealth fund. He received no personal financial benefit from these associations. In return for his advice the Libyan government donated US$50,000 to the School which was placed into a general scholarship fund. Both connections were disclosed to the Council.

LSE IDEAS

LSE IDEAS has issued a press release denying involvement in business deals with Libya, BP and the UK Government.

The Gaddafi Lectures

On 25 May 2010, Saif Gaddafi delivered a lecture at the School, as part of the Ralph Miliband lecture series, on “Libya: Past, Present and Future”. The Miliband Programme Committee meets annually to agree themes for the lectures. It has not been the practice to consult the Miliband family on the content of individual lectures or the speakers who will deliver them.

They were not consulted in advance about the Saif Gaddafi lecture. In view of the embarrassment and distress caused to the Miliband family by the association of Ralph Milband’s name with Saif Gaddafi in light of recent events in Libya, Professor Held (Programme Convener) has spoken to the family and the matter is closed.

LSE security staff have co-operated with an investigation of an allegation of an assault during a protest at the LSE on 25 May 2010 when Saif Gaddafi visited the School to make a speech. This alleged assault, involving one of Gaddafi’s associates and a protestor, is currently sub judice and no further comment can be made.

On 2 December 2010, Colonel Gaddafi gave a lecture via videolink from Tripoli, as he had done previously at Oxford and Cambridge. The circumstances are being examined further.

What is the School doing to limit the reputational damage?

Media Handling

The Press Office has worked to manage the reputation of the School in a number of ways. In particular, proactive statements have been issued -- notably a statement on 21 February that no further funds would be taken from GICDF and a statement on 3 March announcing the resignation of the Director. The resignation statement can be found here.

Earlier statements can be seen below.

Howard Davies has spoken to the press on a number of occasions, but the key interviews were with BBC Radio 4 Today on Monday 28 February and Friday 4 March.

The Press Office has also supported the drafting of letters and Opinion pieces. Opinion-formers, such as politicians, have been briefed. Internally, messages have been conveyed through all-School emails as well as Student News and Staff News. Communications has responded to numerous enquiries from alumni and members of the public.

The Council have commissioned an independent inquiry to be carried out by former Lord Chief Justice, Lord Woolf.

Lord Woolf has decided the following terms of his inquiry:

“An independent inquiry to establish the full facts of the School’s links with Libya, whether there have been errors made, and to establish clear guidelines for international donations to and links with the School.

Lord Woolf is to make recommendations to the LSE Council as soon as possible. He is to have total discretion as to how he conducts the inquiry, and as to the matters on which he is to report.”

Lord Woolf's report will be made public in full following his recommendations to Council. It is hoped the report will be produced before the Autumn but Lord Woolf has reserved his position on that. The procedure for submitting comment and evidence to the Woolf Inquiry via an independent website and address c/o Blackstone Chambers has been described in Staff News. All substantive comments received in the School are being forwarded to Lord Woolf. Lord Woolf has indicated that the internal inquiries described in this note are to proceed, and his Inquiry will, later, "follow in their footsteps".

The LSE Council met on 1 March. It discussed the School's links with Libya and in particular the research grant received from the Gaddafi International Charity and Development Foundation.

The Council agreed a proposal from the School that £300,000, representing the total amount so far received from the Foundation (and no more funding will be received), should be used as a scholarship fund to support students from North Africa studying at LSE. A group including student representation will settle the details. The group will also unwind any remaining financial commitments under the research programme, which has been stopped.

The Council also firmly endorsed the Director's statements and decisions so far, including the decisions to close the research programme and to express regret at the reputational damage for the School caused by the association with the Gaddafi name. It confirmed that the grant proposal had been properly considered by the School in 2009 and agreed by the Council for reasons which appeared sound at that time.

The Council noted that the School, under its normal procedures, was investigating claims of plagiarism and ghostwriting that had recently been made in relation to Saif Gaddafi's PhD thesis.

Update: 28 February 2011

The Director will recommend to the LSE Council on 1 March that the School set aside £300,000 – equivalent to the entire sum received from the Gaddafi International Charity and Development Foundation - for purposes agreed with the wider School community. In particular , the School is looking into establishing a scholarship fund for Libyan students.

Following a meeting of the Academic Board on the 23 February, the School has now decided to refer the full £300,000 received so far from the Gaddafi International Charity and Development Foundation for its North Africa Programme to the LSE Council for review. The School had originally planned to ask Council to consider what to do with the unspent funds, but will now also ask Council to consider whether the School should set aside for purposes agreed with the wider School community funds equivalent in value to the Foundation funds already spent.

The student occupation on this matter has also ended following discussions with the Director. Students are satisfied with LSE's position on the matter, particularly in light of strong support from the student union for the original £1.5 million donation. At the time of the original donation in 2009, the general secretary of LSE Students' Union, wrote to Professor Held: 'It is quite clear that not only is the donation acceptable, it should be encouraged. This is exactly the kind of organisation the School should be associated with - a group struggling for justice under what continues to be, despite reforms, a repressive and brutal regime.'

Update: 23 February 2011

A group of students occupied the Senior Dining Room at LSE on the evening of 22 February 2011. The students have made a number of demands concerning the School's links with Libya ("LSE students occupy against university's ties to Libyan regime"). In particular, they demand that LSE reject further monies from the £1.5 million donation from the Gaddafi International Charity and Development Foundation and use the £300,000 already received to create a scholarship fund for "underprivileged Libyan students".

The LSE Council has stated, in November 2007 and on subsequent occasions, that it is not the practice of the School as an institution to take political positions, unless its own policies and practices are at issue. Of course, individual academics and students are free to take their own positions, individually and collectively, as the School's Articles of Association make clear.

The LSE Director notes the message from some LSE students. He shares the students' revulsion at the recent violence and gross violations of human rights in Libya, and much regrets the association of the School's name with Saif Gaddafi and the actions of the Libyan regime.

The School's statement of 21 February made clear that School engagement with the present Libyan authorities, covering a number of programmes, has already finished or has been stopped following the events of the weekend of 19-20 February.

In 2009, the Gaddafi International Charity and Development Foundation granted LSE £1.5m for the North Africa Programme. The grant was received in good faith; there was due diligence and discussion in Council. The funding for the Programme was raised by the GICDF from private sector companies. The Foundation raises money on a project-by-project basis in a manner similar to other foundations. The bulk of the Foundation's activities focus on peace-building, human rights promotion, developing civil society and its organisations, and a series of charitable concerns.

£300,000 of the grant has been received to date. The North Africa Programme was stopped on 21 February and no more instalments of the grant will be accepted. About half has been spent, mainly on research projects on human rights, women and development, democracy and civil society, and economic diversification. No remaining salaries or other costs will be paid from what remains: the School will meet continuing salary and other commitments from central funds. The LSE Council will now consider what to do with the remaining funds, taking into account proposals from the LSE community, including LSE students.

Following a decision by the Academic Board, an LSE degree may only be revoked if there are substantiated concerns about the manner in which it was attained in the first place – for example if there is a later discovery of plagiarism – and not on the basis of any subsequent shortcomings of personal conduct.

A robust process already exists to ensure that donations to LSE are consistent with LSE's values and standards. Donations that may raise reputational questions are referred to the LSE Council, which includes student representation. The GICDF donation was referred to the Council, which discussed it fully on two occasions and decided, with the consent of the LSE Students' Union, to accept it.

21 February 2011

The School has had a number of links with Libya in recent years. In view of the highly distressing news from Libya over the weekend of 19-20 February, the School has reconsidered those links as a matter of urgency.

LSE Enterprise has delivered executive education programmes to Libyan officials, principally from the Economic Development Board, and managers. That programme has been completed, and no further courses are in preparation. We have also received scholarship funding in respect of advice given to the Libyan Investment Authority in London. No further receipts are anticipated.

LSE Global Governance - a research centre at the School - accepted, with the approval of the School's Council, a grant from the Gaddafi International Charity and Development Foundation, chaired by Saif-al-Islam, one of Colonel Gaddafi's sons and an LSE graduate. This note from LSE Global Governance explains how that money has been used to date, on a North African programme of study, principally involving civil society issues. In current difficult circumstances across the region, the School has decided to stop new activities under that programme. The Council of the School will keep the position under review.

The School intends to continue its work on democratisation in North Africa funded from other sources unrelated to the Libyan authorities.

See a personal statementfrom Professor David Held, Co-Director of the Centre for the Study of Global Governance.

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